Rollover 401(k) in Des Peres, MO
Rollover 401(k) in Des Peres, MO. While moving to a new job can be a welcome new opportunity, it can also create confusion about the best way to manage the savings you have in your 401(k) account with your previous employer. Many Des Peres, MO residents have found that seeking the help of professional financial advisors is the best way to go about handling a 401(k) rollover. At Correct Capital, our experienced team of 401(k) experts and financial advisors will help you get the most out of your savings. For rollover 401(k) advice in Des Peres, MO, give us a call at 877-930-4015 or contact us online.
What You Can Do With Your Rollover 401(k) in Des Peres, MO
Generally speaking, you have four options when considering whether to roll over your 401(k). A professional Des Peres, MO financial advisor like those at Correct Capital will analyze your finances and guide you towards your preferred option. Depending on your current financial health and your time horizon, it may be best to:
- Leave the money in your former employer's 401(k) plan;
- Roll over your 401(k) to a plan with your new employer;
- Roll over your 401(k) into a Traditional IRA or Roth IRA;
- Take the cash value out of your 401(k).
Cashing out is not recommended unless you need money now. Your previous employer would be required to take out 20% of the balance to prepay the taxes you would owe on it. You may also face a 10% early withdrawal penalty from the IRS, and you would would be subject to federal, state, and local taxes. Meaning, you could lose the majority of your savings.
It is important to note that employers in Des Peres, MO are allowed to make you move the money if your plan has less than $5,000 in it. Furthermore, they may be able to cash out your account if it has less than $1,000.
Benefits to Rolling Over a 401(k) into an IRA in Des Peres, MO
Your Des Peres, MO financial advisors at Correct Capital may counsel that rolling over your 401(k) funds into a Traditional or Roth IRA is your best option. There are a variety of advantages to this strategy:
Pay Less in Taxes With Special Rules if You Have Publicly Traded Company Stock in Your 401(k)
Net unrealized appreciation (NUA) is the difference between the cost basis and market value of company stock in your retirement plan. If you won shares of your previous company in your 401(k), you can put that portion of your account into a standard brokerage account, and roll the remainder to an IRA. By separating your 401(k) into two accounts, you may pay long term capital gains tax on your company stock — which is 0%, 15%, or 20%, depending on your income — instead of income tax, which may be significantly more.
The Financial Institution of Your Choice
When you opt to put your savings in a 401(k), you will not have any control over the 401(k) company that holds your money. When you do a 401(k) rollover to a Traditional or Roth IRA, you'll be able to choose your preferred custodian based on how secure they are and the range of services they offer.
A Wider Range of Investment Opportunities
While some Des Peres, MO businesses offer 401(k) plans with few limitations on your investment opportunities, IRAs typically offer an individual investor many more options than 401(k) plans. IRAs typically allow investment in almost any type of asset, including:
- Stocks
- Bonds
- Certificates of deposit
- Mutual funds
- ETFs
- Real estate investment trusts
- Annuities
Consolidate Your Savings Accounts
If you have several 401(k) plans spread across multiple former employers, there are many advantages to merging the funds from all your accounts into one plan. That will make it easier to follow how your investments are performing and managing them will be more streamlined. It may also be the better option for long-term growth.
Continue Adding Money to Your Accounts
While you can still reap the benefits of the investments and savings that are already there, you won't be able to add funds to a 401(k) plan with your previous employer. By rolling over the funds into an IRA, you continue adding more money over time.
The financial advisors of Correct Capital will guide you in your decision of what to do during a 401(k) rollover. We have more than two decades of experience assisting both individuals and business owners in Des Peres, MO with A-Z 401(k) services. When you hire Correct Capital, we'll help you navigate important considerations, such as which type of savings plan fits best in your portfolio.
When to Avoid a 401(k) Rollover in Des Peres, MO
Each of our client's financial situation is unique, and your Des Peres, MO retirement planners at Correct Capital may recommend that your funds should be left in a 401(k) account; whether that be your previous employer's or your new one. Some reasons to choose a 401(k) plan instead of an IRA are:
- If your current 401(k) plan works for you. If the fees aren't exorbitant and the return on investment is good, there may not be a great reason to roll over your 401(k). You are not required to roll over a 401(k) immediately, so you are free to change your mind and transfer the funds at a later date.
- No early withdrawal penalties if you are 55. While both 401(k)s and IRAs permit withdrawals when you are 59½, the threshold in a 401(k) for a 10% early withdrawal fee is 55. So, a 401(k) may be preferable if you would like to retire earlier.
- Loans from an IRA are not allowed. While taking a loan from retirement savings isn't recommended, you would only be able to do so if they are in a 401(k) plan.
- Your employer can put matching contributions into your 401(k) plan. While some employers will allow you to roll money out of your 401(k) to an IRA before retirement, it may make more sense to stick with a 401(k) your employer will match your contributions.
Take a look at some of the other services we offer in Des Peres, MO:
- Succession Planning
- Fiduciary Financial Advisor
- Company 401(k) Plans
- ESOP Advisor
- Self-Employed Retirement Plans
- 401(k) For Small Business
Rollover 401(k) in Des Peres, MO | Correct Capital
At Correct Capital, we give all of our clients bespoke guidance and cater our services and advice to their current financial health, objectives, and time horizon. Our team of retirement consultants, portfolio managers, and financial planners have over seven decades of combined experience aiding Des Peres, MO individuals and families with 401(k) rollovers in addition to several other wealth management services. As fiduciary advisors, we are legally and ethically required to act only in your best interested. As an independent firm, we will always be direct and objective, and there are no limitations to the services or investment opportunities we can recommend.
Reach out to us today at 877-930-4015 or contact us online to schedule an appointment with one of our knowledgeable 401(k) specialists and retirement consultants today.
